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Explain how income can equal output, can equal expenditure.
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Explain how income can equal output, can equal expenditure. This is concerned with macroeconomics - the study of the economy as a whole. Income is the total amount earned by factors of production- land, labour, capital and entrepreneur; so includes wages, interest, rates and profits. E.g. workers receive wages, and entrepreneurs receive profits. Output is the total amount, in money values, produced by an industry or service in an economy, i.e. goods and services produced by manufacturing, construction, distributive, hotel and catering, and agricultural industries. Expenditure is the total value of what is spent on goods and services in an economy, in a year. These can be used to measure GDP (Gross Domestic Product), which is the total output produced in an economy by activities located in that country. The Income Method is adding up everyone's income. It is important to include only payments received in return for providing a good or a service....
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